Ann and Jack have been partners for several years. Their? firm, A? & J Tax? Preparation, has been very? successful, as the pair agree on most? business-related questions. One? disagreement, however, concerns the legal form of their business. Ann has tried for the past 2 years to get Jack to agree to incorporate. She believes that there is no downside to incorporating and sees only benefits. Jack strongly? disagrees; he thinks that the business should remain a partnership forever. ? First, take? Ann's side, and explain the positive side to incorporating the business. ? Next, take? Jack's side, and state the advantages to remaining a partnership. ? Lastly, what information would you want if you were asked to make the decision for Ann and? Jack?

Which of the following statements are the advantages of a partnership compared to a? corporation????(Choose all that? apply.)

A.Long life of firm.

B.Ownership is readily transferable.

C.Owners have limited liability.

D.Less expensive to organize.

E.Lower income taxes.

liability comparisons _Merideth Harper has invested? $25,000 in Southwest Development Company. The firm has recently declared bankruptcy and has? $60,000 in unpaid debts. Explain the nature of? payments, if? any, by Ms. Harper in each of the following situations.

a.??Southwest Development Company is a sole proprietorship owned by Ms. Harper.

b.??Southwest Development Company is a? 50-50 partnership of Ms. Harper and Christopher Black.

c.??Southwest Development Company is a

corporation.

a.??If Southwest Development Company is a sole proprietorship owned by Ms.? Harper,:???(Select the best answer? below.)

A.Ms. Harper has unlimited? liability, which means creditors can only claim against the? $25,000 she invested.

B.Ms. Harper has unlimited? liability, which means creditors can claim against her personal assets.

C.Ms. Harper has limited? liability, which guarantees that she cannot lose more than the? $25,000 she invested.

D.Ms. Harper has limited? liability, which is the amount of? $60,000 in unpaid debts.

Your broker calls to offer you the investment opportunity of a? lifetime, the chance to invest in? mortgage-backed securities. The broker explains that these securities are entitled to the principal and interest payments received from a pool of residential mortgages. List some of the questions you would ask your broker to assess the risk of this investment opportunity.

Questions you would ask? include:???(Select the best choice? below.)

A.Percentage of properties in the region that are? "under water"? (homeowners owe more than they? borrowed) or in foreclosure.

B.Will borrowers soon be experiencing an interest rate increase because they took out a mortgage with a low initial rate that was adjustable after a period of?time?

C.Quality of real estate ? (is it in a good? condition, or would there need to be repairs prior to? sale?) .

D.What percentage of borrowers are behind on their mortgage? payments?

E.Precedence in bankruptcy? (would other lenders have a senior claim to properties in? bankruptcy?).

F.Creditworthiness of borrowers? (how likely is it that borrowers will lose their job and be unable to make payments on a timely? basis?).

G.Real estate location? (after all, the three most important determinants of real estate price are? "location, location,? location").

H.Type of real estate? (commercial properties offer less liquidity if the market turns? sour, because empty homes can be rented for? revenue).

I.All of the above